The forthcoming report on the UK taxi trade from the Office of Fair Trading could lead to major change.

The UK cab trade is apprehensively awaiting the imminent publication of the Office of Fair Trading's report on its study into the taxi and private hire sectors.  Below is a brief outline of the investigation together with possible outcomes.

Background
The investigation was launched in August 2002 and initially focused on local authority restrictions on taxi license numbers, but also included other features of regulation such as vehicle and driver standards.  Earlier this year the study was extended to include the private hire trade.  If the market is found not to be working well, the OFT can recommend changes to government.

License quotas
Perhaps the most likely recommendation to emerge from the study will be the removal of local authority powers to restrict taxi license numbers.  Of course, this was proposed by the Westminster Government in its Regulatory Reform Act Action Plan early in 2002, but the issue was ignored in the Scottish Executive's consultation paper later that year.

Vehicle and driver standards
Among the vexed questions likely to be addressed by the OFT are the issues of vehicle age limits and turning circle requirements, which can obviously restrict entry to the trade.  Similarly, the Knowledge of London will come under particular scrutiny, since this is regarded by some commentators as unduly restricting driver numbers.

Fare setting
One radical option that the OFT may be considering is the removal of tariff-setting powers from licensing authorities, leaving the trade to decide its own fares.  These would probably have to be registered with the authorities and displayed on the vehicle.  While a course of action like this is probably an outside bet, these 'posted' fares are used abroad.

After the report
The OFT cannot do much on its own - it will recommend any action to government and any radical change would probably require the passing of legislation, which could take years.  However, the OFT could decide to refer the trade to the Competition Commission, and it would conduct a more detailed study, and this would prolong the process by at least a year.  Another possible outcome of an OFT study, a 'clean bill of health', seems unlikely.